Unclogging the border

Wednesday, July 24, 2013

Canadian truckers feel sidelined in efforts to improve trade with United States.

By Jon Ross

In 2011, the Canadian and U.S. governments jointly released a report meant to update the processes at their shared border and increase the flow of trade between the nations.
The Beyond the Border Action Plan aims to assist President Obama achieve his pledge to double U.S. exports by 2015, while at the same time helping improve trade relations between two very close trading partners.
In April, $28.9 billion worth of goods was trucked between Canada and the United States, according to the U.S. Bureau of Labor Statistics, a nearly 1 percent rise over the previous month. Total trade between the two nations for April stood at $52.2 million. For 2012, trade between the United States and Canada came to $556.2 billion, an increase of 3.6 percent when compared to 2011’s total.
Since the agreement was signed, however, there has been little progress on key issues important to Canadian truckers, according to David Bradley, president of the Canadian Trucking Alliance. Of the numerous measures included in the agreement, about a dozen of them apply directly to the trucking industry.
The new guidelines set out to modernize the Canadian-U.S. border, redirect security enforcement in a more targeted approach, allow for the freer movement of trusted traders, and other measures. But few results, so far, have been felt by Canadian truckers.
“We do need to see some deliverables at some point, but progress, I think, is being made, albeit slowly at times,” Bradley said.
“One has to weigh the difficulties that there are in terms of two governments working with each other,” he continued. “We’d always like to see things done more quickly and more efficiently.”
The seed for Beyond the Border, which goes back to the start of major congestion issues at the shared border, was planted on Sept. 11, 2001. Since then, the border has seen a number of security procedures heaped on it, resulting in what Bradley called an “alphabet soup of programs.” These programs have caused logjams at border crossings, resulting in lost productivity for carriers. These transportation headaches have lead Bradley, at times, to echo the words of the former U.S. Ambassador to Canada, Paul Celluci: “Security trumps trade.”
On behalf of Canadian truckers, Bradley worries this may still be true. During the past decade, governments have tried and failed to create meaningful policies that don’t restrict the trucked transportation of goods across the border.
“There have been various attempts over the years to try to take a more balanced view and make sure that whatever we established in North America would allow us to not only be more secure but for our supply chains to continue to compete with those in the emerging economies in Asia and the trading blocks in Europe and elsewhere,” Bradley said.
For Bradley, the key recommendation in the Beyond the Border Action Plan is that the two countries harmonize data for in-transit moves, which have been, until now, classified as international shipments. The change would allow Canadian truckers to freely move freight routing from Toronto to Vancouver through the United States without filling out paperwork needed for an international shipment, a change that was made by U.S. officials for security purposes. Bradley said U.S. mail currently moves in transit between Buffalo and Detroit through Canada, so it’s a two-way street.
The problem, Bradley said, is by deeming these “international moves,” the U.S. government has choked off in-transit moves by Canadians. Truckers, sensing inequity, wanted to either bring Canada’s standards up to the U.S. regulations, effectively ending in-transit moves for both nations, or bring the U.S. requirements down to Canada’s standards.
Agreement was reached, but according to Bradley, the final say-so has been held up by government officials.
“That’s an example for us where we were very excited and very pleased with the announcement — pleased with the timelines that were established, pleased with what we understood to be the progress to reach a harmonization — but we don’t have anything official at this point,” he said.
Changes to border crossings are also addressed in the agreement, and there has been some progress on the issue of pre-clearance of goods. This stipulation in the agreement arose to solve the problem of limited space at some border crossings; in some spots along the border, there isn’t enough room to build a modern U.S. Customs plaza on the American side.
After much debate, a proof-of-concept phase has been launched for pre-clearance at a plaza on the British Columbia/Washington border, Bradley said. If everything goes well, he expects to participate in the pilot program at the Peace Bridge border crossing between Fort Erie and Buffalo, N.Y., in the coming months.
One issue not addressed in the agreement, but one which the Canadian Trucking Alliance is very passionate about, is the foreign empty trailer rule. An antiquated guideline based off cabotage laws, truckers from each side of the border have to cross the border and return home with the same trailer. The problem is that with the rise of distribution centers and bigger trailer pools, it is usually much more efficient to take one trailer across the border, drop it off and pick up another trailer for the trip home.
The Canadian Trucking Association and American Trucking Associations have asked both governments to take a look at the rule and see where adjustments can be made. Bradley said, in effect, the request for a rule change is “a litmus test” to see if both governments are serious about making border changes.
Bradley thinks these cross-border trucking issues would be more urgent for carriers had it not been for the recession. The border is backed up, but with the low amount of economic activity currently, things could be much worse. When business starts picking up again, the scenario may become dire.
The economy may have also masked the importance of the border situation to shippers as well. When the market was booming and things were tight at the border, shippers received accessorial charges for time spent waiting in line. When the economy tanked, those charges vanished.
“I’m not sure that shippers haven’t also at times been lulled into this false sense of security because the volume of freight has been masking some of the problems,” he said. “It’s important for shippers, as much if not more than carriers, to be keeping both governments’ feet to the fire on these issues and to not let this opportunity slip away.”